Step number two: Now that we've made it harder for reckless buyers to buy homes that theycan't afford, let's make it a little bit easier for qualified buyers to buy the homes that they canafford. (Applause.) So Shaun Donovan has been working with the finance industry to make surewe're simplifying overlapping regulations; we're cutting red tape for responsible families whowant to get a mortgage but keep getting rejected by the banks. We need to give well-qualified Americans who lost their jobs during the crisis a fair chance to get a loan if they'veworked hard to repair their credit.
And step three is something that you don't always hear about when it comes to the housingmarket, and that is fixing our broken immigration system. It would actually help our housingmarket. (Applause.)
It's pretty simple: When more people buy homes and play by the rules, home values go up foreverybody. And according to one recent study, the average homeowner has already seen thevalue of their home boosted by thousands of dollars just because of immigration. And the goodnews is, with the help of your Senators, John McCain and Jeff Flake, the Senate has alreadypassed a bipartisan immigration bill. It's got the support of CEOs and labor and lawenforcement. (Applause.) This could help homeownership here.
So I want you to encourage Republicans in the House of Representatives to stop draggingtheir feet. Let's go ahead and get this done.
Step number four: We should address the uneven recovery by rebuilding the communities hitthe hardest by the housing crisis, including many right here in Arizona. Let's put constructionback -- construction workers back to work repairing rundown homes, tearing down vacantproperties so that the value of homes in those surrounding areas start picking up. We can putpeople to work right now and improve the remaining housing stock that's out there. (Applause.) Places that are facing a longer road back from the crisis should have their country'shelp to get back on their feet.
Step five: We should make sure families that don't want to buy a home or can't yet afford tobuy one still have a decent place to rent. (Applause.) It's important for us to encouragehomeownership, but a lot of people rent and there's nothing wrong with renting. And we got tomake sure that we are creating affordable opportunities when it comes to rental properties.
In the run-up to the crisis, banks and governments too often made everybody feel like they hadto own a home, even if they weren't ready and didn't have the payments. That's a mistake weshould not repeat. Instead, let's invest in affordable rental housing. Let's bring together citiesand states to address local barriers that drive up rents for working families. (Applause.)
So if we help more Americans refinance their homes, if we help qualified families get amortgage, we reform our immigration system, we rebuild the hardest-hit communities, wemake sure that folks have a decent place to rent if they're not yet able to buy -- all these stepswill give more middle-class families the chance to either buy their own home now or eventuallybuy their own home. It's going to give more relief to responsible homeowners. It gives moreoptions to families who aren't yet ready to buy. All that is going to improve the housing marketand will improve the economy.
But -- and this is the last key point I want to make -- as home prices rise, we can't just re-inflate another housing bubble. I hope everybody here in Arizona learned some hard lessonsfrom what happened. Housing prices generally don't just keep on going up forever at the kindof pace it was going up. It was crazy. So what we want to do is something stable and steady.And that's why I want to lay a rock-solid foundation to make sure the kind of crisis we wentthrough never happens again. We've got to make sure it doesn't happen again. (Applause.)
And one of the key things to make sure it doesn't happen again is to wind down thesecompanies that are not really government, but not really private sector -- they're known asFreddie Mac and Fannie Mae. For too long, these companies were allowed to make huge profitsbuying mortgages, knowing that if their bets went bad, taxpayers would be left holding thebag. It was “heads we win, tails you lose.” And it was wrong. And along with what happened onWall Street, it helped to inflate this bubble in a way that ultimately killed Main Street.
So the good news is, right now there's a bipartisan group of senators working to end Fannie andFreddie as we know them. And I support these kinds of reform efforts. And they're followingfour core principles for what I believe this reform should look like.
First, private capital should take a bigger role in the mortgage market. I know that soundsconfusing to folks who call me a socialist -- I think I saw some posters there on the way in. (Laughter.) But I actually believe in the free market. And just like the health care law that weput in place, Obamacare -- (applause) -- which, by the way, if you don't have healthinsurance or you're buying it at exorbitant rates on the individual market, starting on October1st, you can join a marketplace and be part of a pool that gives you much lower premiums,saves you a lot of money. (Applause.)
But in the same way that what we did with health care was to set up clear rules for insurancecompanies to protect consumers, make it more affordable, but still built on the privatemarketplace, I believe that our housing system should operate where there's a limitedgovernment role and private lending should be the backbone of the housing market. And thatincludes, by the way, community-based lenders who view their borrowers not as a number, butas a neighbor. So that's one principle.
A second principle is we can't leave taxpayers on the hook for irresponsibility or baddecisions by some of these lenders or Fannie Mae or Freddie Mac. (Applause.) We've got toencourage the pursuit of profit, but the era of expecting a bailout after you pursue your profitand you don't manage your risk well -- well, that puts the whole country at risk. And we'reending those days. We're not going to do that anymore. (Applause.)
The third principle is we should preserve access to safe and simple mortgage products likethe 30-year, fixed-rate mortgage. That's something families should be able to rely on whenthey're making the most important purchase of their lives. (Applause.)
Number four, we've got to keep housing affordable for first-time homebuyers -- like all theseyoung people. When they're ready to buy a house, we've got to make sure it's affordable.Families who are working to climb their way into the middle class, we've got to do what we canto make housing affordable. And that means we've got to strengthen the FHA so it givestoday's families the same kind of chance it gave my grandparents to buy a home, and itpreserves those rungs on the ladder of opportunity.
And we've got to support, as I said, affordable rental housing. And, by the way, we've also gotto keep up our fight against homelessness. (Applause.) The Mayor of Phoenix has been doing agreat job here in Phoenix on that front. We've got to continue to improve it. (Applause.)
Since I took office, we helped bring one in four homeless veterans off the streets. (Applause.)We should be proud of that. Here in Phoenix, thanks to the hard work of everyone from MayorStanton to the local United Way to US Airways, you're on track to end chronic homelessnessfor veterans, period, by 2014. (Applause.)